Business Opportunities in Australia
Starting a business in Australia has become relatively easy today, thanks to globalization. Australia is one of the world’s largest and most stable economies that is pretty flexible and competitive. It is one of the few countries where the government encourages foreign investments and foreigners to set up business in Australia for the growth and contribution of their economy.
Additionally, the Australian legal system protects intellectual property rights and minimizes corruption in the country, increasing the suitability for new businesses.
Since business owners always look for economies with low inflation rates, Australia is a commendable fit for anyone seeking to expand their business globally. It has one of the lowest inflation rates. It ranks fifth on the Organisation for Economic Co-operation and Development (OECD) Better Life Index indicating Australians have high disposable income for spending money.
Benefits of Starting a Business in Australia
Numerous factors, including minimal import restrictions, an educated workforce, and diversity and abundance of natural resources, make setting up a business in Australia a lucrative affair for business owners.
The advantages of setting up a business in Australia are numerous; some are listed below:
- Fastest growing economies in the world
- A strong and growing economy
- Stable political scenario
- A high-wage country with wealthy middle-class people
- Diverse culture, open to diverse perspectives because of an educated workforce
- Strong legal structure minimizing corruption and intellectual property thefts
- A progressive tax structure makes the SME sector very strong
- Government grants and encouragement to starting a business in Australia
- Proximity to Asian markets
Requirements for Starting a Business in Australia
The grants provided by the Australian government act as a booster for foreign investors. Thus, it becomes essential to understand the eligibility requirements for setting up a business in Australia. The prime objective of the government-initiated Business Initiated Investment Programme is to grant visas to eligible foreign citizens looking forward to starting a business in Australia.
These visas are
- Business Innovation and Investment (Provisional) Visa
- Business Innovation and Investment (Permanent) Visa
- State or Territory Sponsored Business Owner Visa
- State or Territory Sponsored Investor Visa
- Business Talent (Permanent) Visa
- Business Owner
- Investor Visa
Starting a businessin Australia as a foreign citizen, it is essential to have the right visa. Since there are numerous visa types, it is critical to know which visa would suit your requirement the best.
Types of Business Structures in Australia
When starting a business in Australia, it is crucial to understand which business structure would best suit your business. Understanding the process to set up a business structure is essential as the process for each structure will vary with registration processes, tax positions, the safety of the assets, and sustenance of the business post ownership change.
The different types of legal business entities in Australia are
The decision to select the business structure would depend on the following:
- Paperwork and licenses requirements
- Taxation Structure
- Liability and control of business
It is interesting to note that the business structure is not fixed; with the growth of the business, the owners can change the structure to suit the business requirements.
Company Registration Process
Once the business structure is decided, it is important to register a company in Australia before starting the business operations. The company registration process in Australia is as follows:
- ~Australian Business Number (ABN) is essential to start a business in Australia. It is a unique business number allocated to the business for identification by customers, suppliers, and tax officials.
- ~Register the business name on the Business Registration Service website.
- ~Australian companies or foreign companies must register with the Australian Securities and Investments Commission (ASIC). ASIC defines the work and rights of foreign companies on Australian land and regulations of the foreign companies. ASIC also lists the regulatory requirements for acquiring Australian companies.
- ~The business must obtain the required licenses according to its nature of work, location of the business, and industry it belongs to for operating lawfully in Australia.
- ~Taxes are an essential part of all lawfully operating businesses. The Australian Taxation Office issues business and sole traders in Australia Tax File Numbers (TFN). Proprietors and Sole Traders file taxes under their TFNs, while the other business structures must apply for one of their own apart from their owners, trustees, partners, or Board of Directors.
Apart from the income taxes, businesses must pay several other taxes, such as -
- Goods and Service Tax (GST): Businesses operating in the goods and service industry with an annual turnover of $75,000 or more are required to pay the GST. Businesses that import digital goods costing less than $1000 and have an annual turnover of more than $75,000 must pay GST.
- Pay as You Go Withholding Tax (PAYG): Businesses have to register for PAYG if they are withholding the tax from their employees, workers, owners, directors, contractors, etc. This is required before the first incidence of tax withholding.
- Fringes Benefit Tax (FBT): Businesses have to register for FBT if they are providing fringe benefits to their employees, such as health insurance, education fees, and so on.
How Much Does it Cost to Incorporate a Company in Australia?
The cost of starting a business in Australia depends on several factors, such as the business structure type and industry. Depending on the industry, business owners can spend anywhere from $3,000 to $5,000 to start a small business, and some may even pay as much as $10,000.
This cost is inclusive of -
- ~The cost of registering a business covers ABN Cost, registering the company name, the cost of company registration
- ~The cost of running a business includes salaries, equipment, rent, and building a website
- ~Other costs, including initial marketing expenses, office supplies, insurance fees, accountant fees, etc.
The cost of registration of a business is a one-time cost. However, you must register the business name every year or three years according to your preference. The cost of running a business and other charges vary according to the business type.
Are Foreigners in Australia on Certain Passes Allowed to Start a Business in Australia?
Yes, foreigners can start a business in Australia. However, they must obtain specific visas and permits and follow the registration process for starting a business in Australia.
Foreigners looking to start a business in Australia must ensure that at least one director is an Australian resident. In the case of the public company, two of the three minimum directors must be Australian residents.
Government Assistance for Foreign-owned Businesses
Foreign-owned businesses receive due support and assistance from the Australian Government while setting up their business and operations in Australia, depending on their line of work (industry) business location.
The Australian government also provide grants to foreign business to set up or expand their operations. They offer appropriate incentives and financial services for finding and training skilled professionals.
The Australian government also provides the businesses tax offset for the expenditures on research and development every year. The business has to register its research and development activities with AusIndustry, an Australian Government Agency.
How Multiplier Can Help?
Considering the paperwork and list of requirements for setting up a business in Australia, it is beneficial to seek the assistance of an external service provider. We, at Multiplier, would help you effortlessly and flawlessly expand your business in Australia by being your global employment solution partner.
We understand that finding full-time employees in a new country is difficult, so we help businesses worldwide onboard full-time employees. With Multiplier, you wouldn’t need to worry about the ever-changing labor laws or set up your new business entity in a foreign land. For more details, get in touch with our experts.
Frequently Asked Questions
Does ASIC charges fees for registration?
Companies must pay registration fees, lodgement fees, annual review fees, and late fees to ASIC.
What is the duration of stay on a Business Talent (Permanent) Visa?
Upon obtaining the Business Talent (Permanent) Visa, you can stay, work or study indefinitely.
Is finding the right skilled workforce a task in Australia?
Finding the right skilled workforce can be tiring and overwhelming for foreign-owned businesses. Thus, hiring an employment solution partner, such as Multiplier, can assist.